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Clipper Closer to New Manager

The fund narrows down a short list of investment management firms.

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Clipper Fund has narrowed down its short list for a new skipper.

The fund announced Tuesday that its independent directors approved a short list of investment management firms to evaluate as replacements for Pacific Financial Research. Clipper said the soon-to-be-departing James Gipson and his team at Pacific Financial would continue to manage the fund through the end of the year.

The fund said due diligence on the candidates is under way, with the new firm to be determined by the end of November.

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The search comes after the decision by Pacific Financial's parent, London's Old Mutual, to fold Pacific Financial into the affiliated company Barrow Hanley Mewhinney & Strauss around the beginning of next year. The reorganization is part of the

recent decision of Gipson, Michael Sandler and Bruce Veaco, three of the six principals of Pacific Financial and portfolio managers of the fund, to leave at the end of this year.

``The independent directors want to assure our shareholders that no decision has been made yet about a firm to assume management of the fund,'' F. Otis Booth, one of the independent members of Clipper's board of directors, said in a statement.

``We will of course evaluate Barrow, Hanley as a potential manager of the fund. However, our objective continues to be to conduct a thorough search to identify the best candidates to replace Jim Gipson and his team," Booth added. "We are concentrating our search on firms that will continue the investment approach that Clipper Fund has followed over the years."

Under Gipson and Pacific Financial, Clipper became well-known for holding stocks of large U.S. companies that trade at prices significantly below Pacific Financial's estimate of their intrinsic values. Gipson and company are also well-known for holding large cash positions when they believe they can't find any stocks that meet their value-based criteria.